Choice Controls Costs
How often do you compare costs between your favorite places to get your basic necessities? Whole Foods versus Costco, Nordstrom versus Target, DirecTV versus Netflix? Our free market economy is based on choice and competition. There are multiple companies to provide for any given need, and you can decide which option to choose based on a variety of factors. You might choose the high quality option that costs a little more, the option that saves the most money, or something in between. We live in a world where the consumer sets the standard for retailers in what they provide and at what cost, not the other way around. And the health industry is no exception.
As we discussed in our last blog post, it can be difficult to gather the information you need to make an informed choice about your healthcare. Hospitals routinely hide their pricing information from patients in order to overcharge for their services. This has led to that top American hospitals charging an average of seven times their cost of care. Medical pricing transparency is worth fighting for, and we must all advocate for hospitals to be held accountable to be transparent with the public. However, there are many instances when it is not possible to make informed choices before your medical care. Whether due to an emergency or a lack of resources, we often need to negotiate medical bills after the fact.
HealthSharing Models
Healthcare sharing ministries have taken a few different approaches to controlling medical costs for their members. Originally, healthshares worked on a simple self-pay basis. Members would negotiate with providers themselves for self-pay or cash-pay discounts, and then get reimbursed by the community. This model works, but it is not very convenient for members who need to pay for bills up front. It also only generates an average savings range of 35-45% off of billed charges.
Over time, some ministries started using other strategies. Some healthshares have leased third party networks. The prices are already agreed upon through the network provider, whether it is an HMO or a PPO. This gives their members greater convenience at the point of service, but the members ultimately pay more. On average, this approach saves about 30% off of the original amount billed by providers. This is not nothing, but they’re still overpaying for medical care on a regular basis.
What Does Solidarity Use?
At Solidarity, we employ a method called Reference Based Pricing. With this model, any provider can bill us directly for the services provided. And we want them to, because we reprice the bill to make sure that the charge is fair and reasonable. Rather than starting from the baseline of the original billed charges, we base our repriced amount off of what Medicare would pay for that procedure in that area. This allows us to adjust our pricing to be as specific as possible to what providers will accept, while saving as much money as possible for our Members. This process, along with reviewing each bill to remove any erroneous or excessive charges added, helps us achieve the greatest possible medical savings for our community. Our Reference Based Pricing model has been proven to consistently generate savings of 60-70% off billed charges.
While cash pay is available to our Members, we prefer that your providers bill us directly. This allows us to advocate for you and the fair cost of your medical services. If you’re having trouble finding a provider to submit your bills directly, please reach out to our Care Navigation team. We’ll go over that service in more detail in our next blog post! It is going to be a long road to change the healthcare industry, but holding providers accountable for their billing practices is an extremely important piece of it.